Subject: File No. S7-12-06
From: Bruce Thompson

August 3, 2007

What is fair about our stock market?

As an individual investor, you must play by the rules setup by the prime brokers and the SEC. You are only allowed to buy and sell what you own or can borrow and have on deposit with your broker. You must use real money already in your account to buy and it must settle immediately. To sell, you must have the shares in your account and they too disappear immediately from your account.

How about the other side of the transaction?

Well, lets look at the other side.

First, they don't have to own or borrow any shares to sell to you at all. They can FTD to you until the cows come home. Options market makers and prime brokers can issue and sell naked as many shares as the company can in the name of liquidity, destroying the supply curve and never having to deliver those shares to you. But they get your money immediately and over time as the share price falls and their positions are marked to market. All the while, they are paying themselves billions of dollars in bonuses because they are obviously much smarter than the rest of us about the markets.

The SEC is aiding and abetting these criminal activities by delaying reforms and creating loopholes big enough to drive a fleet of armored trucks through. The elimination of the tick test has already cost the investing world over a trillion (with a T) dollars since its inception in just two bear raids on the NYSE.

Shorters are bragging to the media about how easy it is to raid the market now that the tick test has been eliminated. Meanwhile the rest of us wait patiently, for now over 7 weeks, for crumbs to fall from the table with the elimination of the grandfather clause.

That reform can be typed up in a simple 5 word notice in the federal register. "The grandfather clause is eliminated" Anything longer than that or more complicated than that is simply for the purpose of creating another loophole for the Brinks trucks to drive through.

You people have now eliminated every reason for which your department was created in the '30s. You have given the markets, lock, stock, and barrel, back to the Dark Pools.